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TMI Blog2014 (3) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... inherent and known - Thus, it attracted Section 271(1)(c) of the Act - The claims of depreciation is also to be viewed in the light of the “block of assets” concept introduced w.e.f. the assessment year 1988-89 – Decided in favour of Assessee. - ITA 51/2014 - - - Dated:- 10-3-2014 - S. Ravindra Bhat And R. V. Easwar,JJ. For the Appellant : Sh. Ajay Vohra with Ms. Kavita Jha, Advocates. For the Respondent : Sh. Sanjay Kumar, Jr. Standing Counsel. ORDER Mr. Justice S. Ravindra Bhat (Open Court) 1. Following question of law arises for consideration: Whether the Income Tax Appellate Tribunal (ITAT) in the given facts of this case was justified in reversing the order of the CIT(A) cancelling the penalty imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue. Besides, it was urged that the assessee did in fact engage subsequently in manufacturing activity which was apparent on record and taken into consideration. 3. Having regard to these circumstances, the assessee could not be said to be lacking in bonafide when it made the claim for depreciation because at that stage, its intention to abandon the manufacturing activity was not in fact crystallized. Learned counsel also relied upon the decision of a Division Bench of this Court reported as Addl. CIT v. Rajindra Flour and Allied Industries P. Ltd. (1981) 128 ITR 402 in this regard. Learned counsel for the Revenue raised the submission and urged that the Tribunal s impugned order does not call for any interference and is a well-re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im for the depreciation was a bonafide one. In the return of income the appellant had disclosed that its long term business strategies were being revived and that it had losses, the sale of part of fixed assets (2/3rd) was also disclosed. 6.7 On almost similar issue of claim of lull in business/discontinuance of business/admissibility of depreciation when business not wound up/when company not wound up etc. there are a plethora of judgments both in favour as well as against the assessee s as has been demonstrated in the submissions of the ld. Counsel referred to in para 6.2 supra. When a claim made in the return of income is disallowed on account of the issue being debatable, there being difference of opinion between the AO and the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nable in law, provided that the assessee substantiates the explanation offered by it or the explanation even if not substantiated is found to be bonafide. This judgement applies squarely in the case of the appellant as all material facts have been disclosed in the return of income and the explanation given for claiming the expenditure as revenue expenditure is a bonafide one (rulings in favour of the appellant on the issue of depreciation). XXXXX XXXXXX XXXXXX 5. In this case, it is evident from the above discussion that the CIT (Appeals) was persuaded to hold that the assessee did not indulge in deliberate furnishing of inaccurate particulars and there could be arguably a debatable issue on this aspect. 6. A close analysis of rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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